'We are committed to delivering profitable growth first'

Hindustan Unilever Chairman Harish Manwani, MD & CEO Nitin Paranjpe and CFO R Sridhar speaks to Business Standard after the announcement of the financial results of the company in Mumbai on Tuesday.

What are highlights for the March quarter?
Sridhar: We had a strong volume growth of 11 per cent delivered during the quarter. Overall, growth of our consumer business was ahead of market reported growth. Net sales for the quarter grew 8.2 per cent. In personal products, foods and water, we grew in double digits, ahead of the market. We have taken decisive action to strengthen our leadership in laundry and personal wash. The early signs are positive.

In terms of new categories, we forayed into male grooming with Vaseline Men. We launched Brooke Bond Sehatmand and rolled it across 13 states. We extended our foods portfolio with Knorr Soupy noodles, available in modern trade outlets and in the south. In our water business, we have launched a compact Pureit water purifier at Rs 1,000. In short, we kept the momentum going on launches. Alongside these new launches, we have strengthened our go-to-market capabilities. We have also brought down our cost of goods sold by 80 basis points.

Was there price-led growth during the quarter?
Sridhar: No. As I mentioned, volume growth was 11 per cent, while turnover growth was eight per cent. So, pricing was negative by about 2.5 per cent to three per cent, which was entirely in laundry.

When do you hope to come back to price-led growth?
Manwani: There is no timeline to it. It depends on commodity costs, currency and competition.

Paranjpe: We will do all that it takes to defend our leadership position in laundry. Some action has been taken. There will be a short-term impact, but in the long run, it is consistent with our objective of creating value in this market.

Would you continue to focus on volume growth or value growth in the future?
Paranjpe: Whether volume or value, we are committed to delivering profitable growth first. Volume or value will depend on commodity costs, currency movements, competition. But, we will not move away from profitable growth. Growth is going to come by uptrading consumers, whether in laundry or otherwise. The action that we have taken suggests we are preparing ourselves for the India of tomorrow.

What are your rural plans?
Paranjpe: We intend trebling our rural reach in the next two years. These are big numbers. We reach one million outlets directly, while 5.3 million outlets are reached indirectly. The total reach, then, is 6.3 million outlets. As part of our go-to-market strategy, 12,000 HUL salesmen have been given hand-held devices. These devices help in giving out instructions to them on a daily basis. This was rolled out in March this year.

Image: Harish Manwani